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ECON 1000 Lecture Notes - Average Variable Cost, Diminishing Returns, Marginal Cost

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School
York University
Department
Economics
Course
ECON 1000
Professor
George Georgopoulos

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ECON 1000 Full Course Notes
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ECON 1000 Full Course Notes
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Document Summary

Long run: time frame in which the quantities of all factors of production can be varied: long run decisions are not easily reversed, sunk cost: a cost incurred by the firm and cannot be changed. Product curves: graphs of relationships between employment and the three product concepts: total product curve: similar to ppf, separates attainable product levels from unattainable product levels. Height of each bar measures marginal product: marginal product curve: how the marginal product relates to total product. Law of diminishing marginal returns: as a firm uses more of a variable factor of production, with a given quantity of the fixed factor of production the marginal product of the variable factor eventually diminishes. Factors of production become less suited, and less access to capital: average product curve: shows average product and its relationship with marginal product. Average fixed cost (afc): total fixed cost per unit of output. Average variable cost (avc): total variable cost per unit of output.

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Related Questions

1) Marginal product of labour is the increase in total product that results from a A) one-unit increase in both the quantity of variable and fixed inputs. B) one-unit increase in the quantity of fixed inputs employed, holding the quantity of the variable inputs constant. 1 percent change in the quantity of labour and the quantity of capital employed. D) one-unit increase in the quantity of labour employed, other inputs remaining the same. E) change in the cost of labour.

1) Marginal product of labour is the increase in total product that results from a A) one-unit increase in both the quantity of variable and fixed inputs. B) one-unit increase in the quantity of fixed inputs employed, holding the quantity of the variable inputs constant. C) 1 percent change in the quantity of labour and the quantity of capital employed. D) one-unit increase in the quantity of labour employed, other inputs remaining the same. E) change in the cost of labour.

10) Marginal product of labour is the increase in total product that results from a A) one-unit increase in the quantity of fixed inputs employed, holding the quantity of the variable inputs constant. B) 1 percent change in the quantity of labour and the quantity of capital employed. C) change in the cost of labour. D) one-unit increase in both the quantity of variable and fixed inputs. E) one-unit increase in the quantity of labour employed, other inputs remaining the same.